As private equity’s return equation becomes more demanding, commercial execution carries greater weight. Simon-Kucher’s 2026 Private Equity Value Creation Study examines how higher-performing firms turn growth opportunities into EBITDA across the hold period.
Private equity has become far less forgiving of weak execution. The return equation is more demanding, with market tailwinds, leverage, and multiple expansion offering less support while current deal economics require stronger EBITDA growth to achieve target returns. Cost reduction can make an important contribution, but there are limits to how far it can go. For many investments, a greater share of value creation now must come from revenue growth.
That puts commercial performance firmly inside the investment case. Sponsors need to find credible growth through levers such as pricing, sales effectiveness and customer development, then convert it into EBITDA within a finite hold period. The opportunity can be substantial, but realizing it at the pace and scale required is hard.
Our 2026 Private Equity Value Creation Study, based on 215 respondents, shows that high MOIC firms consistently:
Quantify upside of commercial initiatives in diligence: 52% of high-performing firms almost always quantify the EBITDA upside from commercial opportunities identified in diligence, compared with 19% of low-MOIC firms.
Carry it into underwriting: 51% almost always incorporate that quantified upside into underwriting or investment committee materials, compared with 29% of low-MOIC firms.
Activate commercial levers faster: 50% say at least one commercial initiative is almost always activated within six months of close, compared with 32% of low-MOIC firms.
The differences are visible across the ownership lifecycle. Stronger performers bring commercial execution into the deal case earlier, protect more of the hold period for execution, keep changing priorities as evidence develops, and arrive at exit with a clearer story about what the next owner can still capture. Commercial execution therefore becomes a lifecycle discipline that starts before close and continues through exit.
Build the confidence to underwrite commercial upside
PE executives already recognize the diligence gap. 82% agree that the ability to execute commercial value creation is becoming just as important as identifying value opportunities. Yet 66% say commercial due diligence spends too much time assessing the market opportunity and too little assessing whether management can actually deliver it.
The same imbalance shows up in what diligence tests. When firms assess commercial levers, 70% evaluate pricing strategy, but only 33% assess pricing implementation. A sponsor can therefore leave diligence with conviction in the size of the opportunity without equivalent confidence in the path to unlock it.
Commercial diligence needs to get closer to execution. How much value is available, and how quickly could it reach EBITDA? What would management need to do differently? What capabilities, resources and decisions are required? Where could delivery run into trouble? Answering those questions gives the deal team a more precise view of the opportunity and what it will take to capture it.
The strongest hypotheses should emerge with the value at stake, the route to delivery, and the critical assumptions clearly understood. That gives the investment committee firmer ground for deciding how much commercial upside belongs in the deal case and gives management a sharper starting point after close.
Turn diligence hypotheses into management-owned priorities
The benefit of that work shows up quickly after close. High-MOIC firms carry commercial upside into activation more consistently, with 50% saying an initiative is almost always launched within six months when diligence identifies an opportunity, versus 32% of low-MOIC firms. The first weeks (or even pre-close) should turn pre-close hypotheses into a focused set of management-owned priorities with clear owners and support.
Starting quickly does not mean loading the business with every plausible initiative. Leadership bandwidth constraints and lack of portfolio-company resources or expertise are the two most common reasons commercial initiatives fail to meet the business case, with 46% and 45% of respondents selecting each respectively.
The first wave should favor a small number of high-confidence levers with enough value, a credible route to impact, and the capacity to deliver. Pricing is often a strong candidate because it combines:
The highest chance of exceeding goals: 86% of respondents say pricing initiatives have historically met or exceeded their business-case goals, including 36% who say they exceeded them.
The fastest time to impact: The median time to impact is just 4 months, the fastest among the commercial levers tested.
Management should remain accountable for delivery, with sponsors helping remove obstacles or bring in specialist expertise where needed. If the business does not have the capacity to execute an initiative well, the better decision may be to narrow its scope, change the sequence, or defer it. A smaller first wave that lands is more valuable than a long agenda that diffuses management attention.
Keep re-underwriting (and re-resourcing) the value creation plan
While acting immediately post close builds important momentum, it’s not the only chance as sponsors are revisiting priorities more frequently. 57% now formally review pricing and commercial priorities at least every six months. Just last year, only 20% reviewed value creation plans with a sub-six-month cadence, pointing to a material increase in how often firms revisit the plan.
The harder question is whether those refreshes change resource decisions. Only 11% systematically reallocate capital or operating resources based on ROI or hurdle rates, even though 40% do so regularly. A useful VCP refresh should force choices: scale initiatives that are proving out, rework or stop those that are not, and move management attention and capital toward the highest-return opportunities.
Higher-MOIC firms appear better equipped to make those reviews substantive. 56% use dedicated commercial value creation capabilities or portfolio-wide systems, more than twice the 25% of low-MOIC firms. Lighter models can still build discipline through regular portfolio scrubs, dedicated engagement at CXO meetings, required commercial discussion in board materials, and access to specialist expertise when a thesis needs to be stress-tested.
Strengthen the exit story buyers can underwrite
Execution discipline carries through to exit, but the emphasis changes in late hold. During the last 12 to 18 months, 51% of high-MOIC firms lean toward actively packaging credible upside for the next owner, compared with 21% of low-MOIC firms. The aim is to keep delivering current EBITDA while building a clear, evidenced runway that a buyer can underwrite.
That evidence needs to be operational as well as strategic. Respondents say the strongest buyer proof points are clear commercial leadership and ownership, and commercial dashboards, each cited by 48%. Evidence of price realization and customer-level performance analytics follow at 37% each, with retention and expansion processes at 36%.
Exit preparation needs to begin well before the sale process. Weak data, underdeveloped commercial capabilities, or gaps in governance take time to fix and prove. Focused vendor diligence on commercial performance, pricing, or future growth can help substantiate both what has already been achieved and the upside that remains under new ownership.
Commercial execution is an investment advantage
The same execution discipline increasingly shapes the LP conversation. High-MOIC firms are more than 3x as likely to say commercial value creation maturity is very important in LP diligence and fundraising, at 44% versus 12%. Across the full sample, respondents say LPs most often ask for realized impact (63%), a credible operating team model (57%), and case studies (53%).
That raises the bar from delivering individual wins to proving a repeatable capability across the portfolio. Sponsors need an evidence trail that connects what was underwritten, what was activated, how resources changed, what reached EBITDA, and what was packaged for the next owner. Over time, those proof points become part of the firm's track record with LPs.
Strong commercial execution can expand what a sponsor is prepared to underwrite, shorten the path from investment thesis to EBITDA, strengthen the exit story, and create more credible evidence for the next fundraise. As more of the return depends on performance inside the portfolio company, commercial execution becomes part of the investment thesis itself.
Explore the full findings, benchmarks and implications from Simon-Kucher’s 2026 Private Equity Value Creation Study.
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